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Qantas To Add More 737s To Mainline Fleet

Qantas has boosted its orders for Boeing 737-800s and revealed plans for a cabin refresh of its AirbusA330 fleet, with both moves aimed at further upgrading its domestic operation.

Converting five options for 737-800s will increase its firm orders for the type to 13. Qantas expects to be operating 75 of the -800s by the end of its 2014/2015 fiscal year, compared to its current total of 62. In addition, Qantas will this year renew the leases on two of its current 737-800 fleet, which were due to be returned to lessors. The majority of its -800 fleet is owned rather than leased.

All of Qantas’s 737-800s are used on domestic routes, except eight which are flown on routes to New Zealand under the Jetconnect subsidiary. The airline’s remaining 737-400s are due to be phased out by the end of this year, as previously planned.

Qantas says it will begin an interior upgrade for the group’s A330s beginning in late 2014. It will have 10 A330-300s and 20 A330-200s at that point. The upgrade will include lie-flat seats in business class, an economy cabin refresh, and new inflight entertainment systems.

The A330-200s are currently split between Qantas mainline and the Jetstar subsidiary, but will all be moved over to the mainline operation as Jetstar receives Boeing787s. All of Jetstar’s 11 A330-200s are expected to be switched to Qantas by mid-2015, a Qantas spokesman tells Aviation Week. This will align with the phase-out date for its Boeing 767s, which will be replaced by A330s in the mainline fleet. The -300s will be used primarily for routes to Asia, and the -200s for domestic flights.

The carrier is scheduled to have the first of its Boeing 787-8s – earmarked for Jetstar – delivered in the middle of this year. Qantas CEO Alan Joyce says the carrier has received no formal notice on whether there will be delivery delays related to Boeing’s battery problems.

However, during the carrier’s latest earnings call, Joyce admitted that Qantas is making contingency plans for a possible delay. The airline has flexibility in its fleet to cope with further delays if they do occur, says Joyce.

Joyce says Qantas’s new code share flights with Emirates are selling well. Bookings for these opened three weeks ago, after Australian regulators granted interim approval for the linkup. During the second week of sales, Qantas sold five times more code-share tickets involving Emirates flights than it did in the same week last year for British Airways code-share flights. The increased demand justifies the cost of up to A$50 million ($51.2 million) for moving Qantas’s Europe connecting hub from Singapore to Dubai.

Qantas announced a net profit of A$111 million for the six months through Dec. 31, up from A$42 million in the same period in the previous year. All of the business segments were profitable, except for the mainline international operation.

However, while Jetstar and Qantas domestic saw profits decline, the international unit saw its loss decrease significantly. The international operation’s earnings before interest and taxes (EBIT) loss for the six-month period was A$91 million, compared to a loss of A$262 million in the prior year. Joyce says the international unit is on track to meet its target of achieving profitability by fiscal year 2015.